Ukraine seeks full scale oil&gas coop with Turkmenistan-Yanukovich

September 13, 2011, 9:28 UTC+3The head of Turkmenistan, unlike his Ukrainian counterpart, did not mention the gas issue of the negotiations

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ASHGABAT, September 13 (Itar-Tass) — Ukraine seeks full scale cooperation with Turkmenistan in the oil and gas industry, Ukrainian President Viktor Yanukovich said on Monday at a meeting with his Turkmen counterpart Gurbanguly Berdymukhamedov. The Ukrainian head of state is on a two-day official visit to Turkmenistan, which holds the 4th place in the world in terms of the natural gas reserves.

“Ukraine will intensify the work in this sphere, discussing concrete projects and cooperation mechanisms, including with neighbouring countries that are our partners in the transportation of energy resources,” Yanukovich said.

The head of Turkmenistan, unlike his Ukrainian counterpart, did not mention the gas issue of the negotiations. He only stressed the “intensification of mutually beneficial relations with Ukraine in the field of construction, transport, telecommunications, agriculture and in the humanitarian sphere.”

Ukrainian Minister of Energy and Coal Industry Yuri Boiko raised the issue of energy cooperation in a conversation with reporters. “We are confident that we can find a common interest in diversifying the gas supply routes that Turkmenistan has been doing in recent years,” he said. “Given the fact that we have political stability and the will of the presidents,” the minister noted, “we have good prospects for cooperation in the oil and gas sphere with Turkmenistan.”

On the eve of the visit the Ukrainian president’s press service reported that “cooperation in the energy sphere will be in the focus,” but the main issue of the talks “will be the possible resumption of supplies of Turkmen gas.”

From 2001 to 2005, Ukraine was the direct and main buyer of Turkmen gas, the volume of supply of which exceeded 40 billion cubic metres a year. In 2006 Turkmenistan did not renew the gas sale contract because of Ukraine’s gas debt. Turkmen gas was supplied to Ukraine since then by Russia’s Gazprom. In 2009, Russia significantly reduced the volume of purchases of Turkmen gas due to the global economic crisis.

At present, Turkmenistan supplies natural gas to Russia, Iran and China. The two latter directions have got additional pipeline capacities in recent years. Thus, the Turkmenistan-China gas pipeline this year exports up to 17 billion cubic metres of gas, and in a year the volume of deliveries will reach 30 billion cubic metres. In the future, Turkmenistan is going to export 60 billion cubic metres of gas annually to China.

Turkmenistan is also hurried by the organisers of the Nabucco project who expect from it guaranteed gas exports to Europe. According to Turkmen Vice Prime Minister Baymyrat Khodzhamukhammedov, “Turkmenistan is ready to supply to Nabucco 40 billion cubic metres of gas through the Trans-Caspian gas pipeline.”

The Nabucco pipeline (also referred as Turkey–Austria gas pipeline) is a proposed natural gas pipeline from Erzurum in Turkey to Baumgarten an der March in Austria diversifying natural gas suppliers and delivery routes for Europe. The pipeline attempts to lessen European dependence on Russian energy. The project is backed by several European Union states and the United States and is seen as rival to the Gazprom-Eni South Stream pipeline project. At the same time, there are some doubts concerning viability of supplies. The main supplier is expected to be Iraq in cooperation with Azerbaijan, Turkmenistan, and possibly Egypt. Preparations for the Nabucco project started in 2002 and the intergovernmental agreement between Turkey, Romania, Bulgaria, Hungary and Austria was signed on 13 July 2009. The project is developed by the consortium of six companies. If built, the pipeline is expected to be operational by 2017 and it will carry 31 billion cubic metres of natural gas per year.

Over the first six months of this year, according to the state concern Turkmengaz, the country’s gas exports accounted for more than 18 billion cubic metres, of which 5.4 billion cubic metres have been supplied to Russia. In 2010, Turkmenistan’s gas production was 46.9 billion cubic metres, and exports - 22.5 billion cubic metres.